China Pledges Rural Reforms to Boost Incomes

The government will increase agricultural subsidies and ensure “reasonable returns” from planting crops, the official Xinhua news agency reported on Dec. 22, citing an annual work conference to set rural policy.

The goals, which include increasing rural incomes by at least as much as those in urban areas, reflect a new leadership’s focus on reforming the land system and addressing wealth disparities as it encourages migration into towns and cities to boost consumption. Li Keqiang, set to take over from Wen Jiabao as premier in March, is championing urbanization as a growth engine.

“A completely new policy approach is emerging under Li Keqiang,” said Yuan Gangming, a researcher in Beijing with the Chinese Academy of Social Sciences. “It’s about giving farmers a bigger share from land deals, it’s about changing local governments’ reliance on revenues from land, and it’s ultimately about a fairer system of sharing China’s economic growth.”

Yuan said he expects the government to be appointed in March to announce “a slew of policy initiatives” from changes to the household registration, or hukou, system to trading in land-use rights as part of Li’s urbanization drive.